LVGEM CHINA's subsidiary plans to sell hotel properties located in Los Angeles, USA for USD 20 million
LVGEM CHINA announced that its wholly-owned subsidiary LVGEM Hotel Corporation has reached an agreement with Capital Insight Holdings LLC to sell a hotel property located in Los Angeles for USD 20 million. The hotel is situated in the Covina area of California and has 258 guest rooms. Although this sale will result in a loss, the company's management believes that this move will improve its financial condition and provide cash flow for repaying outstanding debts
According to the announcement from LVGEM CHINA (00095), on January 16, 2025, the seller (a wholly-owned subsidiary of the company, LVGEM Hotel Corporation) entered into an agreement with the buyer, Capital Insight Holdings LLC, under which the seller agrees to sell all its interests in the hotel assets to the buyer for a cash consideration of USD 20 million, subject to the terms and conditions set forth in the agreement.
The hotel is located in the Covina area of California and has 258 rooms. Given the current market conditions, the company's management has been considering ways to generate additional cash flow to improve the company's financial situation, including but not limited to selling properties classified as property, plant, and equipment in the group's audited financial statements as of December 31, 2024, when buyers are available. Considering the group's current financial and liquidity situation, although the hotel assets are being sold at a price lower than their book value and the company will recognize a loss from the sale, the transaction allows the group to liquidate its investment in the hotel assets and generate cash to repay the outstanding debts guaranteed by the seller, thereby improving the company's financial condition
